Recent discussions in the House of Commons have brought to light the severe implications of bank closures in rural areas. Led by Simon Hoare, MP for North Dorset, a debate on bank closures in rural areas highlighted the disproportionate hardship these closures inflict on rural communities compared to urban settings. The dialogue underscored the need for a "rural-proofing" approach to banking services, acknowledging that rural and urban areas face vastly different challenges.

Rural towns, often structured in a hub-and-spoke model, rely heavily on local banks to support small businesses and maintain community cohesion. The closures lead not only to economic strain but also intensify social isolation among residents, particularly the elderly and disabled who are less likely to use digital banking services. The absence of nearby banking facilities forces residents to travel considerable distances, compounding their day-to-day challenges.

David Smith, MP for North Northumberland, also highlighted the critical role of the Post Office in providing banking services where branches have closed. His constituency, one of the largest in England, faces similar challenges with a significant reduction in bank branches, underscoring the importance of comprehensive banking solutions that include the support of community structures like the Post Office.

Several MPs echoed the sentiment that the loss of banks, often coupled with the loss of post offices, erodes community bonds and accessibility to essential services. The debate highlighted a stark statistic: North Dorset has seen a 74% reduction in banks since 2015, with similar reductions reported across other rural constituencies.

The discussion also brought up the role of banking hubs as a partial solution, providing essential services where banks have retreated. However, the effectiveness of these hubs is limited if they do not fully cater to the unique needs of rural populations. MPs argued for a more aggressive rollout of these hubs, alongside legislative changes to ensure banks consider the broader impacts of their closures.

In closing, the debate stressed the urgent need for legislative action to ensure that banks maintain a physical presence in rural areas or provide comparable services that address the specific needs of these communities.

The government's response, conveyed by James Murray, Exchequer Secretary to the Treasury, emphasised a commitment to ensuring that everybody has appropriate access to banking across the country. James Murray stated:

"We understand the importance of both digital and face-to-face banking services and are working to ensure that banking hubs meet customers' needs following branch closures. We are committed to rolling out 350 banking hubs by the end of this Parliament, providing a mix of services that include wider banking activities beyond mere cash transactions.

More broadly, this Government are committed to improving the quality of life for people living and working in rural areas, so that rural communities and businesses can realise their full potential." This statement reinforces the government's recognition of the unique challenges faced by rural areas and its commitment to enhancing the support for these communities".

A further debate on high street bank closures, led by Ian Lavery, MP for Blyth and Ashington, pressed upon the severe impact of the decline in bank branches, especially on vulnerable groups and rural communities. The debate focused on the challenges faced by residents due to the lack of local banking services, which has led to financial exclusion for many, including the elderly and disabled. Various MPs emphasised the urgent need for banking hubs and changes to the criteria used by regulatory bodies like Link and the Financial Conduct Authority to ensure better accessibility and service provision.

Proposals included revising criteria to consider community needs more deeply and ensuring sustained local banking presence through regulatory requirements on banks. The government recognised these issues, with commitments to improve digital and transport infrastructure to support access to banking services, while maintaining some level of in-person banking facilities through the introduction of banking hubs.

The RSN recognises the critical role that accessible banking services play in sustaining rural economies and communities. We urge policymakers and banking institutions to consider the far-reaching effects of their decisions on rural life and to invest in solutions that uphold the viability and vibrancy of these essential areas.